If Martin sells a shirt for $40,and his producer surplus from the sale is $8,his cost must have been
A)$48.
B)$32.
C)$8.
D)$40.

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price at which a good is sold and its cost of production. Therefore, if Martin's producer surplus from the sale is $8 and he sold the shirt for $40, then his cost must have been $40 - $8 = $32. Hence, the correct answer is B.

If Martin Sells a Shirt for $40,and His Producer Surplus